"From a technical standpoint, sterling/dollar is bullish in the short term with the breakout above $1.2875 opening a path towards $1.3000. If bulls fail to conquer the $1.3000 level, then prices may descend back towards $1.2875 and $1.2775 respectively."

The pound's decline in the wake of the Brexit vote last June contributed to booming exports among manufacturing firms in April, according to a survey released by IHS Markit.

Fawad Razaqzada, market analyst at Forex.com, added: "With manufacturing PMI figures from both the UK and Eurozone showing growth, this has dampened worries that the impact of Brexit was beginning to bite."

However, he admitted PMI figures from the UK's construction and services sectors, due out later this week, could revive the worries again.

Elsewhere, the euro was broadly unchanged against the dollar, trading at $1.0905, while the latter struggled to make significant gains against the other major G10 currencies. The greenback rose 0.30% against the yen to ¥112.17 and gained 0.17% and 0.15% against its Canadian and Australian counterparts respectively, fetching CAD$1.3704 and AUD$1.3297.

However, the US currency was 0.23% lower against the Swiss franc, trading at CHF0.9940.

Analysts have suggested investors are unlikely to indulge in any major moves ahead of the Federal Reserve's two-day meeting, which kicks off later today.